Market overview: At a glance
What's in this report?
Introduction
Top 5 trends:
1. Clean demand
3. Beauty tech
4. Who's next?
Source: Capstone Headwaters
Key market challenges addressed
The rise of direct-to-consumer brands like Glossier, Anastasia Beverly Hills, The Ordinary and Drunk Elephant has revolutionised the beauty industry – and the resulting competition placed on the major corporates has prompted a surge in M&A activity over the past five years.
Transactions have become more numerous and higher in value and challenges have arisen for potential acquirers as a result.
Susan Babinsky, Senior Vice President of Kline Group, says: “The flurry of M&A activity over past several years has reduced the pipeline of good sized opportunities (eg $100m- plus brands or companies) thus companies are snatching up small and sometimes less proven businesses – often for quite a premium.
Drunk Elephant is rumoured to be exploring billion-dollar sale deals
“When gem M&A candidates do come along – such as the current Nestlé Skin Health Consumer Business (comprised of Cetaphil skin care, Proactiv acne treatment and Differin, an OTC switch acne drug) – expect a very nice multiple to be paid by the strategic buyer (such as P&G, L’Oréal, Coty, etc) who is likely bidding for this business.”
Rising deal values are also sparking an emerging trend for beauty corporates to incubate their own new brands, particularly in the area of natural and sustainable beauty, creating branding that is entirely separate from the corporate identity, with a focus on faster-to-market product development and on creating consumer communities.
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Featured companies
- Companies:
- L'Oreal
- Nestle Group
- Euromonitor International
- L'Occitane
- Elemis
- The Red Tree Consultancy
- Procter and Gamble
- Kline and Company
- Baylor Klein
- Unilever
- Pearlfisher
- Yes to Inc
- Ulta Beauty
- Charlotte Tilbury
- Daxue Consulting
- Huda Beauty
- Modiface
- Madison Reed
- Glossier
- Drunk Elephant
- onefourzero
- CB Insights
- Alantra
- The Sage Group
- Capstone Headwaters
